Thursday, October 6, 2022

Tencent tumbles after Chinese media calls online gaming “spiritual opium” By Reuters

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© Reuters. FILE PHOTO: A Tencent logo is seen at its booth at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang/File Photo

SHANGHAI (Reuters) -Shares of online gaming companies, including Tencent Holdings (OTC:) Ltd and NetEase (NASDAQ:) Inc, tumbled on Tuesday after a Chinese state media outlet branded online gaming “spiritual opium” and called for more curbs on the industry.

Tencent, China’s biggest social media and video games company, tumbled more than 9% in early morning trade, while Netease slumped more than 13%.

The article, published by the state-run Economic Information Daily, said many teenagers were addicted to online gaming and that was negatively impacting their growth. The news outlet is affiliated with the official Xinhua news agency.

It repeatedly cited Tencent’s flagship game Honor of Kings, saying it was the most popular online game played by students, sometimes for up to eight hours a day.

“No industry, no sport, can be allowed to develop in a way that will destroy a generation,” said the article, which also likened online games to “electronic drugs”.

Tencent did not immediately respond to a Reuters request for comment.

China has vowed to strengthen rules around online education and gaming to protect child wellbeing. Last month, it issued sweeping rules barring for-profit after-school tutoring in core school subjects, a move that threatens to decimate its $120 billion private tutoring sector.

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